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Monday, January 30, 2023
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EditorialReliance on foreign aid

Reliance on foreign aid

The news that Pakistan won’t go into default and will get $3 billion from a friendly country within two weeks will help the country’s foreign exchange situation, according to Federal Finance Minister Ishaq Dar. The good news from Saudi Arabia about economic stability is that the Saudi Fund for Development provided $3 billion for one year. This sum is a portion of Pakistan’s foreign exchange reserves and has been deposited with the State Bank of Pakistan. Originally set to be returned on December 5, this money will now stay with Pakistan for an additional year due to the SFD announcement. The purpose of this deposit is to boost the bank’s foreign exchange reserves and assist Pakistan in reducing the economic effects of the global COVID-19 epidemic, so this extension of the deposit period represents a continuation of the government of the Kingdom of Saudi Arabia’s cooperation with Pakistan. It should be mentioned that Saudi Arabia gave Pakistan this sum in November 2021.

Although the timely assistance from a friendly nation is appreciated, there are still plenty of reasons to be concerned about the International Monetary Fund (IMF), about which Ishaq Dar appears to be alarmed. Speaking to a private television station, the finance minister indicated that a backup plan has been created if the IMF’s 500 million dollar tranche is not received. There hasn’t been a payment yet that wasn’t delivered on schedule. His statement is entirely valid, and Pakistan’s repayment of $1 billion in Sukuk bonds three days ahead of schedule serves as evidence. The elite of the nation continues to harm the exchequer by receiving concessions, advantages, and facilities, thus, the government must reform domestic work.

In addition to the tremendous economic crisis that Pakistan is currently experiencing, political groups have started fighting one another, which has led to political and social unrest. No one seems willing to listen to others because their own personal and group interests are being placed ahead of public and national objectives. The economic crisis can only be resolved when all of the political leaders see it as the most important and sensitive issue facing the nation, come to a consensus, and decide to temporarily set aside their individual and group interests. As a result, the political establishment may focus its efforts on resolving the nation’s issues while also sending a message to the populace that, at least temporarily, they shouldn’t consider themselves supporters and sympathizers of any political party, but rather Pakistanis.

Because the government did not lower the price of petrol, which resulted in billions of rupees being imposed on the people, the burden of inflation is being placed on them. When the US Department of State has made it clear that the US has not placed limitations on the export of Russian oil, the government will need to speak with Russia once more to obtain inexpensive oil. To discuss buying oil from Russia, a delegation from Pakistan led by the minister of state for petroleum, Mussadik Malik, has also traveled to Moscow. How long this advancement will take to manifest in practice remains to be seen.

Although friendly nations and international organisations’ good economic support for Pakistan is evidence of their faith in that nation, our ruling circles should critically examine how long we will rely on external assistance. Incentives worth $17.5 billion are given to the affluent annually in Pakistan, according to a UNDP report, a division of the United Nations. Can’t we find a way to lessen these temptations and steer the economy of the nation in a stable direction?

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